Big Four consulting firm Ernst & Young (EY) has launched a cryptocurrency tax tool to assist crypto users when the dreaded tax returns are due. A press release states that the EY Crypto-Asset Accounting and Tax (CAAT) tool is a technology solution that “facilitates accounting and tax calculations for cryptocurrency transactions”.
“EY CAAT exemplifies our commitment to exceptional client service in a changing landscape,” said Marna Ricker, EY Americas Vice Chair of Tax Services. “We are excited to offer an innovative technology specifically to address our clients’ needs in the crypto-asset space”.
The rollout is limited to the US at the moment, but with plans to expand worldwide. Regulations surrounding crypto taxes are different in every country, but US crypto investors must report gains and losses on every cryptocurrency transaction or when they earn any cryptocurrency. Regardless of gain or loss, even if the gain or loss is not significant, the Internal Revenue Service (IRS) holds the user responsible for reporting all income and transactions.
Because the IRS identifies crypto as property and not currency, tax rules that apply to property also apply to cryptocurrencies.
Connecting With Multiple Crypto Exchanges And Wallets
EY CAAT has the ability to source transaction-level information from virtually all major exchanges, consolidating data from multiple sources and allowing for the automated production of various reports and dashboards, and preparation of IRS tax returns related to crypto-assets.
“The initial validation we have received from the market has been phenomenal, but it only represents the beginning,” said Michael Meisler, partner and EY global blockchain tax leader. “EY professionals and clients alike are eager to leverage this technology. EY CAAT is the hallmark of our efforts in crypto-assets and blockchain from a tax perspective globally, and we will continue to work hard to make it the product of choice for EY clients”.
EY CAAT will be used to serve institutional clients that have crypto-assets on their balance sheets, as well as institutional and individual clients who trade on a smaller scale.
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